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It’s a Crazy Real Estate Market – Will Your House Appraise?
One of the biggest problems in today’s local real estate market is will your house appraise when it sells for way over asking price? There is such a lack of inventory in the Johnson County market that houses are selling within hours of coming on the market. Home buyers are doing anything and everything to be the winning offer in a multiple offer situation. And they are paying way too much for houses that aren’t really worth what they are selling for and that’s a real problem.
Truth of the matter is, the house still has to appraise. Before the appraisal the sellers and buyers have to agree to terms after all the inspections are complete. Only after that will the appraisal be ordered by the lender.
Appraisers are very busy in this crazy market. They are doing their best to get appraisals back to the lenders in enough time to go through underwriting, get final loan approval and close on time.
But what happens when the appraiser doesn’t find comparables to substantiate your home’s selling price?
Will your house appraise? 3 tips…
- First of all, waiting to look at all offers after being on the market for 3 days is probably going to be your first problem. Don’t be greedy. You know what your house is worth…if you sell it for $20,000 over asking price, will your house appraise? Probably not. Don’t blame the appraiser. He’s just doing his job. Don’t expect him to put some unrealistic value on your house when it doesn’t exist. He’s working for the buyer and the lender. He’s going to say, “Show me the comps you used to arrive at this price.” Do they exist? Appraisers need proof. I sold Rick and Karen’s house by the end of the first day on the market to a cash buyer and for $15,000 over asking – with no appraisal. We had one offer of $23,000 over asking. I thought that was going to be a problem.
- Your appraisal is going to be done very late in the game…maybe a couple of weeks before closing. If this is the case, you need to do everything you can to make your house look its best. Impressing the appraiser is especially important if your house sold for over asking price. The appraiser is still going to compare apples to apples but I’ve had them tell me, “That house sure does show well.” BINGO! That will usually raise the price to an extent. That’s where home staging comes into play. The showings may be over, but next to your showings to nab the perfect buyer, the appraisal is the next most important showing there is. Get this one wrong and it could not only botch your sale, it could make a big difference in your next purchase.
- Have a plan with your agent before your house comes on the market. IFTTT, is what I call it. If this, then that. Work through some scenarios of what might happen. If you have a brand new agent, they may not have enough experience of what will happen. But an experienced agent should be able to walk you through what to expect. Have that discussion before you’re running high on emotion and you’re unable to make a good decision based on facts. My average house sells the first day on the market because I set it up to happen that way. It’s part of my marketing plan so I pretty much know what’s going to happen and I expect it.
Having a game plan is a big part of will your house appraise? Think things through before you make some potential huge mistakes. If your house doesn’t appraise for the price it sold for, be ready for that as well. Don’t make your next transaction dependent on every dime you’re expecting to receive on your house. You might not get what you thought and could end up not having enough money to close on your next home. I hear horror stories other agents tell. The job of your agent is to guide you through a successful transaction. Remember, the results you get will be because of the agent you choose. Choose carefully!
If you are selling your home, want a smooth transaction, a house that appraises, and more money in your pocket, call me at (913) 515-3250 or contact me here.
Click here for your home’s real value versus the Zillow Zestimate or call for a FREE 20 minute walk through.
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(all data current as of 12/11/2019)
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